Second opinion on medical bills
Diagnosis: As insurers shift responsibility for medical spending to patients, consumers are being overwhelmed by bills and choices. Prescription: New software and services to help patients track and manage their medical costs.
(Business 2.0 Magazine) -- When tech entrepreneur Todd Lash's son, Simon, was born seven years ago with developmental problems, he and his wife, Tracy Joe, faced a barrage of never-ending medical bills.
The California couple couldn't find any software to help manage the mess, so last year Lash launched SimoHealth - named for Simon, now a happy first-grader - a PC application that organizes health-care expenses and uncovers discrepancies among medical bills, health-care payments, and insurance reimbursements.
His timing was perfect: AOL co-founder Steve Case's Revolution Health Group scooped up Simo Software a few months later for an undisclosed amount, adding Lash's startup to its portfolio of consumer-oriented medical services companies. The market for medical-expense software is not expected to exceed a modest $15 million to $30 million annually, but the real attraction for Revolution was the chance to incorporate SimoHealth into a forthcoming health portal.
"As consumers become more responsible for their health-care management and more fiscally responsible for their treatment," Lash predicts, "these tools will become ubiquitous."
That's certainly the trend: In just the past year, the number of people switching to high-deductible insurance plans and paying for medical care through health savings accounts tripled to 3 million.
By 2010 these so-called consumer-directed health plans are expected to account for a quarter of the market. That's creating a huge opportunity to help consumers track, invest, and spend the $75 billion they'll sock away in health savings accounts. Meanwhile, insurers' byzantine ways are spurring demand for software from new makers like SimoHealth and established ones like Intuit. As many as nine out of 10 medical bills contain errors, according to Medical Billing Advocates of America.
SimoHealth monitors how much money remains in your health savings account and will issue an alert when you've met your deductible for the year, green-lighting elective surgery. Best of all, it's always on duty, never plays golf, and works on Wednesdays.
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